SATISH KUMAR SAINI,JAIPUR V. INCOME TAX OFFICER , ALWAR

ITA 1526/JPR/2024

AI Insights

The case involves an appeal by Satish Kumar Saini against the order of the CIT(A), National Faceless Appeal Centre, Delhi, which upheld the reassessment proceedings initiated under Section 147 and notice under Section 148 of the Income Tax Act, 1961. The reassessment was based on information that the assessee had deposited cash aggregating to \\u20b922,66,200 in his bank account during the Financial Year 2011-12, for which no return of income was filed. The Tribunal found procedural lapses in the reassessment process, including the absence of a clear finding on the service of notice and the communication of 'reasons to believe' for reopening the assessment, necessitating a de novo assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 469912 (ITAT-JAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-04-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Other Referred Cases: CIT vs. P. Mohanakala (2007) 291 ITR 278 (SC), GKN Driveshafts (India) Ltd. v. ITO [(2003) 259 ITR 19 (SC)]
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: GAUTAM SINGH CHOUDHARY
• Assessee Lawyers: VISHAL KALRA; THR. V.C
• Keywords: Difference of opinion; Change of opinion; Opportunity of being heard; Reassessment proceedings; Principle of natural justice; Reason to believe; Procedural lapse
• Section: 147; 148; 144; 142(1); 69A

Judgement Text

"vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh jkBkSM+ deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA. No. 1526/JPR/2024 fu/kZkj.k o\"kZ@Assessment Year : 2012-13 Satish Kumar Saini Near Gayatri Mata Mandir, Dabla Road, Ward No. 4, Kotputli, Jaipur. cuke Vs. The Income Tax Officer, Ward-1(2), Alwar. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: BWQPS1001N vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Vishal Kalra, C.A. (Thr. V.C.) jktLo dh vksj ls@ Revenue by : Shri Gautam Singh Choudhary, JCIT lquokbZ dh rkjh[k@ Date of Hearing : 04/02/2025 mn?kks\"k.kk dh rkjh[k@Date of Pronouncement : 02/04/2025 vkns'k@ ORDER PER: DR. S. SEETHALAKSHMI, J.M. This appeal is filed by the assessee against the order of the Ld. CIT(A), National Faceless Appeal Centre, Delhi dated 22.10.2024 [hereinafter referred to as “CIT(A)/NFAC”] for the assessment year 2012-13, which in turn arise from the order dated 15.11.2019 passed under section 144/147 of the Income Tax Act, [hereinafter referred as “Act” ] by the ITO, Ward-1(2), Alwar. 2. The assessee has raised following grounds:- ITA No. 1526/JPR/2024 Satish Kumar Saini vs. ITO 2 “1.On the facts and circumstances of the case, the ld. CIT(Appeals) failed to appreciate the fact that the notice under section 148 and order were passed by different authorities which is against the provisions of law. Further, the alleged order under section 127 has been passed without recording reasons for doing so and without affording reasonable opportunity of being heard to the assessee. Hence, it is hereby prayed to quash the notice under Section 148 as well as the order so passed in pursuance thereof. 2. On the facts and circumstances of the case, the Id. CIT(Appeals) grossly erred in law and facts by ignoring the contention of the assesse that the order was invalid and time barred as it was never uploaded on portal and the order so sent afterwards was also not bearing any document identification number. It is hereby thus prayed to thus declare the order as invalid in eyes of law and quash it. 3. On the facts and circumstances of the case, the Id. CIT(Appeals) grossly erred in law and facts by ignoring the contention of the assessee that the notice under Section 148 was not served upon the assessee even till the conclusion of assessment proceedings. Hence, it is hereby prayed to quash the entire proceedings. 4. On the facts and circumstances of the case, the Ld. CIT(Appeals) erred in law and facts by approving the action of Ld. A.O of passing the order without affording reasonable opportunity of being heard to the assessee. As same is against principles of natural justice, it is hereby prayed to quash the order so passed. 5. On the facts and circumstances of the case, the Ld. CIT(Appeals) grossly erred in law and facts by passing the order without properly considering the reply of the assessee. The order was also lacking reason for rejecting various submissions of the assessee. Further, there were some vague contentions made in order on behalf of assessee such as alleged plea of change of opinion. Thus, it is hereby prayed to quash the order so passed. 6. On the facts and circumstances of the case, the Ld. assessing officer issued notice Section 148 under without obtaining proper sanction under Section 151. Hence, it is hereby prayed for quashing the notice so issued as well as the proceedings in pursuance thereof. 7. On the facts and circumstances of the case, the Ld. CIT (Appeals) grossly erred in law and facts by approving the action of Ld. A.O of issuing the notice and passing the order without providing assessee with the material in his possession which formed the basis of forming reason to believe that income has escaped assessment in hands of assessee. It is thus against the provisions of law and mandate given by various legal precedents. It is thus hereby prayed to quash the notice under Section 148 as well as the entire proceedings in pursuance thereof. ITA No. 1526/JPR/2024 Satish Kumar Saini vs. ITO 3 8. On the facts and circumstances of the case and without prejudice to other grounds of appeal, the addition by the Learned assessing officer in the hands of the of Rs 2496200.00 under Section 69A was without jurisdiction as the matter was not covered under the scope of that section. It is hereby thus prayed to delete the said addition. 9. On the facts and circumstances of the case, the Ld. CIT(Appeals) grossly erred in approving the action of the learned assessing officer of making an addition of Rs 2496200.00 to the income of the assessee ignoring the fact that assessee has very well explained source of cash for which ample opportunity for submissions as requested by assessee was not given to him. Hence, it is hereby prayed for quashing the order so passed. 10. On the facts and circumstances of the case, it is hereby prayed for deleting the addition of Rs 59329.00 towards interest income as the assessee was never asked for explanation about same. It is thus against principles of natural justice to make the addition without providing reasonable opportunity of being heard to the assessee. 11. On the facts and circumstances of the case, it is hereby prayed for deleting the addition of Rs 75000.00 towards Chapter VIA deductions as the assessee was never asked for evidences of same. It is thus against principles of natural justice to make the addition without providing reasonable opportunity of being heard to the assessee. 12. The appellant hereby pray for leave to add, alter substitute or delete any one or more of the grounds of appeal at the time of or before the actual hearing of the assessee.” 3. Brief Facts of the Case The present appeal pertains to Assessment Year 2012–13. In the instant case, as per assessment order, information available with the Department revealed that the assessee had deposited cash aggregating to ₹22,66,200/- in his bank account during the Financial Year 2011–12. The assessee had filed his return of income on 30.03.2013 declaring total income of ₹1,27,650/-. However, since the source of the said cash deposits remained unverifiable, proceedings under Section 148 of the Income Tax Act, 1961 ITA No. 1526/JPR/2024 Satish Kumar Saini vs. ITO 4 were initiated vide notice dated 26.03.2019, after obtaining due approval from the Principal Commissioner of Income Tax, Alwar. The case was subsequently transferred to the present Assessing Officer vide order passed under Section 127(2) of the Act. Despite issuance of statutory notices under Sections 142(1) and 133(6), the assessee failed to comply and did not furnish the requisite details. Accordingly, in view of repeated non-compliance and the matter becoming time-barred, the assessment was completed ex parte under Section 144 of the Act on the basis of material available on record by the Ld.AO. During the course of assessment proceedings, it was observed by the Ld.AO, that the assessee had made cash deposits of ₹12,96,200/- in his account with Central Bank of India and ₹12,00,000/- in his account with IDBI Bank, aggregating to ₹24,96,200/-, for which no satisfactory explanation or supporting documentary evidence was furnished. The said amount was accordingly treated as unexplained money under Section 69A of the Act and added to the assessee’s total income. Further, interest income of ₹59,329/- credited in the bank accounts was also found to be unreported and was added to the total income. A claim of deduction amounting to ₹75,000/- under Chapter VI-A was disallowed for want of evidence. ITA No. 1526/JPR/2024 Satish Kumar Saini vs. ITO 5 The Ld. AO held in the assessment order that the assessee had failed to discharge the onus of proving the source and genuineness of the cash deposits, and in absence of any plausible explanation or documentary proof, the deposits were deemed to represent unexplained money within the meaning of Section 69A. The failure to furnish return within the prescribed time, non-reporting of interest income, and non-compliance with notices further established concealment and deliberate withholding of information from the Department. In view of the above, total concealed income was determined at ₹25,55,529/-. Penalty proceedings under Sections 271(1)(c), 271F, and 271(1)(b) of the Act were separately initiated for concealment of income, failure to furnish return within prescribed time, and non-compliance with statutory notices, respectively by the Ld.AO 4. Being aggrieved, from the said order of assessment, the assessee filed an appeal before the Ld. CIT(A). The ld. CIT(A) after hearing the contention of the assessee partly allowed the appeal of the assessee by giving following findings on the issue:- “5. DECISION:- Before me, the submission made by the appellant is carefully considered while disposing the present appeal. It is worth noting that the appellant frequently sought adjournments throughout the proceedings, citing various reasons. These requests for adjournments were duly granted in the interest of providing the appellant ample opportunity to present his case. Further, on going ITA No. 1526/JPR/2024 Satish Kumar Saini vs. ITO 6 through the appellant's submission, it could be seen that the appellant has primarily contested the reopening of the assessment under Section 147 of the Income-tax Act, 1961, and the issuance of the notice under Section 148 of the Act. After carefully considering the submissions made by the appellant, I find no merit in these objections. The AO, upon receiving detailed information regarding cash deposit of Rs 22,66,200/- during F.Y. 2011-12, observed that that the appellant had not filed return of income for the year under consideration. Based on this information, the AO formed a prima facie belief that the income chargeable to tax had escaped assessment. Consequently, the AO initiated the reopening of the assessment under Section 147 of the Act and issued a notice under Section 148 of the Act. Notice u/s 148 was issued to appellant on 26/03/2019 after taking prior approval of Pr.CIT, Alwar and said notice was duly served upon the appellant through Speed Post vide No. 5362. Further, the AO claimed that the said notice along with other notices was duly served upon the appellant through registered email as well as speed post. It is important to emphasize that throughout the assessment proceedings, the appellant entirely failed to substantiate the nature and source of the cash deposits in question. Moreover, the appellant remained unresponsive and did not provide any submissions or explanations, despite being given ample opportunity to do so. Further, the AO had tangible and sufficient reasons to believe that the income had escaped assessment based on information that was not previously disclosed or considered during the original assessment. The appellant's argument that the reassessment is based on a mere change of opinion is legally untenable. The reopening of an assessment under Section 147 is justified when the AO has reason to believe that income chargeable to tax has escaped assessment due to the failure of the assessee to fully and truly disclose all material facts necessary for the assessment. In this case, the AO's reasons for reopening the assessment were grounded in concrete information indicating that certain income was not disclosed in the original return, thereby warranting reassessment. Given these considerations, it is evident that the reopening of the assessment in the appellant's case is both legally valid and procedurally correct. The appellant has also argued that the order passed by the AO did not bear a Document Identification Number (DIN), attempting to challenge the validity of the proceedings on this basis. However, this objection reflects a misunderstanding of the core issue at hand and appears to be a futile attempt to undermine the assessment Upon a thorough review of the case, it is evident that an intimation letter, duly containing DIN No. 20121034018, was issued to the appellant on 15/11/2019, the same day the order was passed. It is important to clarify that, as per CBDT guidelines, in instances where orders cannot be generated directly through the system, a separate DIN is issued to ensure procedural compliance. In this case, the DIN was properly assigned, and the procedure followed was in line with the applicable norms. Therefore, ITA No. 1526/JPR/2024 Satish Kumar Saini vs. ITO 7 the appellant's claim regarding the absence of a DIN is entirely unfounded and cannot be upheld. The copy of intimation letter is re-produced below :- ……………………………………. 5.1. Considering the above facts and discussion, the objections raised by the appellant are without substance and do not undermine the legitimacy of the reassessment proceedings initiated by the AO. Accordingly, the appellant's contentions are dismissed, and the reopening of the assessment is confirmed. 5.2. Now come to addition made of Rs.24,96,200/- on account of unexplained money u/s 69A of the Act. With respect to addition, the appellant's merely claimed that the cash deposits represented re-deposits of previously withdrawn amounts has not been substantiated with any cogent evidence or documentation. It is pertinent to note that mere oral statements or assertions without documentary proof cannot be accepted as a valid explanation under the law. In fact, the appellant's failure to provide even the basic documentation, such as withdrawal slips, bank statements, or any other proof linking the re-deposits to earlier withdrawals, makes the claim untenable. This principle finds support in several judicial rulings, where courts have held that vague and unsubstantiated claims cannot be entertained by the tax authorities. With regard to the addition made under Section 69A of the Income-tax Act, the appellant has been utterly unable to provide any corroborative evidence to satisfactorily explain the source of the cash deposits. Section 69A deals with unexplained money, and the onus is squarely on the assessee to provide a credible explanation backed by evidence to substantiate the source of the funds. In the present case, despite repeated opportunities, the appellant has failed to discharge this burden, and no supporting documentation, credible evidence, or logical explanation has been provided to explain the large cash deposits. The principles laid down by the Hon'ble Supreme Court in CIT vs. P. Mohanakala (2007) 291 ITR 278 (SC) are applicable here, wherein the Court held that if the explanation offered by the assessee is found to be unsatisfactory, the amount so credited may be deemed to be the income of the assessee, and no further burden lies on the Revenue to prove the source of such deposits. In conclusion, the appellant has been unable to provide any valid justification or evidence to counter the additions made by the AO, and the grounds raised in the appeal are without merit. In light of above discussion, I am inclined to agree with the addition of Rs. 24,96,200/- made by the AO. Therefore, addition of Rs.24,96,200/- made u/s 69A is hereby confirmed. Similarly, addition of Rs.59.329/- made by the AO on account of interest income is also confirmed. Further, the appellant has failed to furnish the documentary evidences of claiming deduction u/s chapter VI of Rs. 75,000/-, therefore, denial of claim of deduction of Rs.75,000/- is hereby justified. Accordingly, all grounds raised by the appellant is hereby deleted. 5.3. In last ground, the appellant craves to add, modify other grounds at the time of hearing. Since no such option has been exercised by the appellant the ground raised by the appellant is dismissed as such. 6. In the result the appeal is partly allowed.” ITA No. 1526/JPR/2024 Satish Kumar Saini vs. ITO 8 5. We observed from the appellate order that Ld.CIT(A) has considered the submissions made by the assessee and noted that the reopening under Section 147 and the issuance of notice under Section 148 were based on specific information of cash deposits amounting to ₹22,66,200/- during FY 2011-12, for which no return of income was filed initially. We further note that the AO obtained prior approval from the Pr. CIT, Alwar, and served the notice via speed post and email. The LD. CIT(A) held that the reassessment was legally valid and procedurally correct, dismissing the assessee’s objections on service of notice and absence of DIN, observing that a DIN was duly allotted via intimation dated 15.11.2019. Further, we note regarding the addition of ₹24,96,200/- under Section 69A, the Ld. CIT(A) upheld the AO’s action, observing that the assessee failed to provide any documentary evidence to support the claim that the deposits were re-deposits of earlier withdrawals. The explanation was found vague and unsubstantiated. The reliance was placed on the judgment in CIT v. P. Mohanakala (2007) 291 ITR 278 (SC). The additions of ₹59,329/- towards unreported interest income and disallowance of ₹75,000/- under Chapter VI-A were also confirmed due to lack of evidence. The appeal was partly allowed, by the LD. CIT(A) ITA No. 1526/JPR/2024 Satish Kumar Saini vs. ITO 9 but all substantive additions were upheld. Only technical arguments were considered and dismissed. 6. Aggrieved from the order of the ld. CIT(A) the assessee has preferred this appeal before us on the grounds as reiterated in para 2 above. 7. Per contra, ld. DR supported the orders of the Ld. CIT(A). 8. We have heard the submissions and perused the material available on record, including the grounds of appeal, assessment order dated 15.11.2019 passed under Section 144/147 of the Income Tax Act, 1961, and the order of the Ld. CIT(A), NFAC, dated 22.10.2024 .We note that the primary contention raised by the Ld AR for the assessee pertains to the validity of the reassessment proceedings initiated under Section 147 and the issuance of notice under Section 148 of the Act. The assessee has alleged procedural lapses, including absence of valid service of notice, lack of proper approval under Section 151, absence of DIN on the order, and denial of reasonable opportunity to present his case during assessment proceedings. 9. Further we note that the Ld. CIT(A) has held that notice under Section 148 was validly issued on 26.03.2019 after obtaining prior approval of the Pr. CIT, Alwar, and was duly served by Speed Post as ITA No. 1526/JPR/2024 Satish Kumar Saini vs. ITO 10 well as email. However, from the record, it is noted that despite several allegations raised by the assessee regarding non-service and procedural irregularities, no clear finding was given by the Ld. CIT(A) on whether these contentions were independently verified with supporting records or merely accepted on the basis of submissions by the AO. 10. We observe that in the interest of natural justice, this aspect requires further factual verification. (a) The assessee has also raised a legal plea that reassessment proceedings are invalid in absence of communication of “reasons to believe” and failure to provide the material forming basis for reopening. While the Ld. CIT(A) upheld the reopening citing prima facie belief formed by the AO, there is no mention of whether the reasons were ever provided to the assessee upon request, which is mandatory in light of the judgment of the Hon’ble Supreme Court in GKN Driveshafts (India) Ltd. v. ITO [(2003) 259 ITR 19 (SC)]. (b) With respect to the addition of ₹24,96,200/- under Section 69A, the AO has treated the cash deposits as unexplained money due to lack of any supporting documentary evidence from the assessee. The assessee claimed these were re-deposits of earlier withdrawals but did not substantiate the same with bank statements or cash flow summary. ITA No. 1526/JPR/2024 Satish Kumar Saini vs. ITO 11 However, it is also noted that the assessment was completed ex parte under Section 144 due to non-compliance and alleged non-service. The Ld. CIT(A) upheld the addition, but again did not verify whether proper opportunity of hearing was extended to the assessee after reopening. (c) As regards the addition of ₹59,329/- towards interest income and disallowance of ₹75,000/- under Chapter VI-A deductions, it is evident that no opportunity was provided to the assessee to explain the same during the assessment, especially when the proceedings were completed ex parte. The CIT(A) has mechanically confirmed these additions without offering any relief or directing a remand. 11. Considering the totality of facts and circumstances of the case and in the interest of substantial justice, especially in view of the assessee’s consistent contention regarding denial of opportunity, improper service, and lack of supporting material furnished by the AO, we are of the considered view that the matter deserves to be restored to the file of the Assessing Officer for denovo assessment after providing adequate opportunity to the assessee and strictly in accordance with law. The AO shall also ensure that all notices are duly served and reasons for reopening are duly communicated in writing to the assessee, if not already done.The ITA No. 1526/JPR/2024 Satish Kumar Saini vs. ITO 12 assessee is also directed to cooperate in the proceedings and furnish requisite details to substantiate his contentions. 12. Before parting, we may make it clear that our decision to restore the matter back to the file of the ld. AO shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the ld. AO independently in accordance with law. In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced in the open Court on 02/04/2025. Sd/- Sd/- ¼ jkBkSM+ deys'k t;UrHkkbZ ½ ¼MkWa-,l-lhrky{eh½ (Rathod Kamlesh Jayantbhai) (Dr. S. Seethalakshmi) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 02/04/2025 *Santosh vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 1. vihykFkhZ@The Appellant- Satish Kumar Saini, Jaipur. 2. izR;FkhZ@ The Respondent- ITO, Ward-1(2), Jaipur. 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur. 6. xkMZ QkbZy@ Guard File { ITA No. 1526/JPR/2024} vkns'kkuqlkj@ By order lgk;d iathdkj@Asst. Registrar "